HILL
Theory
Theoryof
of Strategic
StrategicManagement
Management 10th
10thed.
ed.
Chapter
Strategic
Strategic Leadership:
Leadership:
Managing
Managing the
the
Strategy-Making
Strategy-Making
Process
Process for
for
Competitive
Competitive
Advantage
Advantage
Prepared by C. Douglas
Cloud
Professor Emeritus of
Accounting
Pepperdine University
OVERVIEW
OVERVIEW
OVERVIEW
OVERVIEW
Supporting products
Delivering
Control systems
Improving efficiency
and effectiveness of
operations
Culture
Learning
Learning Objective:
Objective: After
After reading
reading this
this
chapter
chapter you
you should
should be
be able
able to
to explain
explain what
what
is
is meant
meant by
by competitive
competitive advantage.
advantage.
To increase shareholder value, managers must
pursue strategies that increase the profitability of the
company and ensure that profits grow.
To do this, a company must be able to outperform its
rival. In other words, it must have a competitive
advantage.
A company has competitive advantage over its rivals
when its profitability is greater than the average
profitability and profit growth of other companies
competing for the same set of customer.
SUPERIOR
SUPERIOR PERFORMANCE
PERFORMANCE
SUPERIOR
SUPERIOR PERFORMANCE
PERFORMANCE
COMPETITIVE
COMPETITIVE ADVANTAGE
ADVANTAGE
AND
AND A
A COMPANYS
COMPANYS BUSINESS
BUSINESS
MODEL
MODEL
A business model is a model of how to generate that
above-average profitability and profit growth. A business
model includes:
Selecting Customers
Acquiring and Keeping
Customers
Producing Goods and
Services at Lower Costs
Creating Value
Delivering Goods and
Services to the Market
Organizing Activities
Configuring its resources
Within the Company
Achieving and Sustaining a High Growing the Business Over
Level of Profitability
Time
Learning
Learning Objective:
Objective: After
After reading
reading this
this chapter
chapter
you
you should
should be
be able
able to
to discuss
discuss the
the strategic
strategic role
role
of
of managers
managers at
at different
different levels
levels within
within the
the
organization.
organization.
PRIMARY
PRIMARY TYPES
TYPES OF
OF MANAGERS
MANAGERS
LEVELS
LEVELS OF
OF STRATEGIC
STRATEGIC
MANAGEMENT
MANAGEMENT
LEVELS
LEVELS OF
OF STRATEGIC
STRATEGIC
MANAGEMENT
MANAGEMENT
Corporate-Level Managers
Business-Level Managers
Responsible for business unit that provides product/service to
particular market
Functional-Managers
Supervise particular function/operation (e.g. marketing,
operations, accounting, human resources)
Learning
Learning Objective:
Objective: After
After reading
reading this
this
chapter
chapter you
you should
should be
be able
able to
to identify
identify the
the
primary
primary steps
steps in
in aa strategic
strategic planning
planning
process.
process.
STRATEGY
STRATEGY PLANNING
PLANNING PROCESS
PROCESS
STRATEGY
STRATEGY PLANNING
PLANNING PROCESS
PROCESS
STRATEGY
STRATEGY PLANNING
PLANNING PROCESS
PROCESS
MISSION
MISSION AND
AND VISION
VISION EXAMPLES
EXAMPLES
Organization
Mission
Vision
North South
University
produce competent
graduates in their
selected disciplines
who will have
productive careers or
choose to engage in
advanced studies.
Microsoft
At Microsoft, we work
to help people and
businesses throughout
the world realize their
full potential. This is
our mission. Everything
we do reflects this
mission and the values
that make it possible.
Create experiences
that combine the
magic of software with
the power of Internet
services across a world
of devices.
MISSION
MISSION AND
AND VISION
VISION EXAMPLES
EXAMPLES
Organization
Mission
Vision
Chevron
Our Company's
foundation is built on
our Values, which
distinguish us and
guide our actions. We
conduct our business
in a socially
responsible and ethical
manner. We respect
the law, support
universal human
rights, protect the
environment, and
benefit the
communities where we
work."
STRATEGY
STRATEGY PLANNING
PLANNING PROCESS
PROCESS
STRATEGY
STRATEGY PLANNING
PLANNING PROCESS
PROCESS
The
The Mission
Mission Statement
Statement
STRATEGY
STRATEGY PLANNING
PLANNING PROCESS
PROCESS
External
External Analysis
Analysis
STRATEGY
STRATEGY PLANNING
PLANNING PROCESS
PROCESS
SWOT
SWOT Analysis
Analysis and
and the
the Business
Business
Model
Model weaknesses,
The comparison of strengths,
opportunities, and threats is normally referred to as a
SWOT analysis.
The goal of a SWOT analysis:
Create, affirm, or fine-tune a company-specific
business model.
Design a business model that will best align, fit,
and match a companys resources and capabilities
to the demands of the environment in which it
operates.
STRATEGY
STRATEGY PLANNING
PLANNING PROCESS
PROCESS
SWOT
SWOT Strategies
Strategies
Business-level strategies
The way a company positions itself in the
marketplace to gain a competitive advantage.
The different position strategies that can be used in
different industry settings.
STRATEGY
STRATEGY PLANNING
PLANNING PROCESS
PROCESS
SWOT
SWOT Strategies
Strategies
STRATEGY
STRATEGY PLANNING
PLANNING PROCESS
PROCESS
Strategy
Strategy Implementation
Implementation
Strategy implementation involves taking action at the
functional, business, and corporate levels to execute a
strategic plan.
Putting quality improvement programs into place
Changing the way a product is designed
Positioning the product differently in the
marketplace
Offering different versions of the product to
different consumers
A
A Comprehensive
Comprehensive Strategic
Strategic Management
Management Model
Model
EXISTING BUSINESS MODEL
MISSION, VISION, VALUES, AND
GOALS
SWOT: STRATEGIC CHOICES
FUNCTIONAL LEVEL STRATEGIES
BUSINESS LEVEL STRATEGIES
Internal
Analysis:
Strengths and
Weaknesses
External
Analysis:
Opportunities
and Threats
GLOBAL STRATEGIES
CORPORATE LEVEL STRATEGIES
GOVERNANCE AND ETHICS
ORG.
STRUCTURE
ORG. CULTURE
MEASURE AND EVALUATE
PERFORMANCE
ORG. CONTROL
1-23
Learning
Learning Objective:
Objective: Some
Some tools
tools for
for
improving
improving Decision
Decision Making
Making and
and Strategic
Strategic
Planning
Planning
Scenario
Scenario Planning
Planning
Scenario planning involves formulation plans that are
based upon what-if scenarios about the future.
Teams of managers are asked to develop specific
strategies to cope with each scenario.
The great virtue of the scenario approach is that it can
push managers to think outside the box.
Read more about scenario planning and Royal Dutch Shell:
http://www.gbn.com/about/scenario_planning.php
Techniques
Techniques for
for Improving
Improving Decision
Decision Making
Making
Learning
Learning Objective:
Objective: After
After reading
reading this
this
chapter
chapter you
you should
should be
be able
able to
to discuss
discuss the
the
role
role strategy
strategy leaders
leaders play
play in
in the
the strategystrategymaking
making process.
process.
Characteristics
Characteristics of
of Good
Good Strategic
Strategic
Leaders
Leaders
1) Vision, Eloquence, and Consistency
a) A strong leader gives an organization a sense of
direction.
b) Examples: Winston Churchill, Martin Luther King, Sam
Walton
2) Articulation of a Business Model
a) Knowing how the various strategies that the company
pursues fit together.
b) Examples: Michael Dell (Dell, Inc.), Steve Jobs (Apple)
(continued)
Characteristics
Characteristics of
of Good
Good Strategic
Strategic
Leaders
Leaders
3) Commitment
Characteristics
Characteristics of
of Good
Good Strategic
Strategic
Leaders
Leaders
Characteristics
Characteristics of
of Good
Good Strategic
Strategic
Leaders
Leaders
7) Emotional Intelligence